Ripe for Growth

Typhoons have made farming a tough business in the Philippines, but new markets for exports, including Australia for mangoes and the US and Vietnam, for coconuts, are helping.

Sergio Held

Filipinos have mixed feelings about nature. On the one hand, nature, and specifically the agricultural sector, is the source of occupation for a third of the country's workforce. On the other, it is such dependence on agriculture that makes the Philippines, and its cultivation of fruit and vegetables, so vulnerable to the vagaries of nature and climate.

For now, the country isn't a major exporter of fruit or vegetables, in no small part due to the prevalence of typhoons that affect output, as well as markets closed off due to worries about infestations. But the Philippines has all the conditions of being a country to be reckoned with, and every day, new markets are opening up to its produce.

With a labour force of 41 million, agriculture accounted for 32 percent of the workforce in 2013 and contributed to 11.2 percent of GDP. The country enjoys a tropical climate conducive to growing tropical produce; in some areas, annual rainfall is up to 5,000 millimeters.

About 17 percent of its soil is dedicated to permanent crops, in which diverse fruits are grown, including bananas, pineapples, sugarcane, coconut and mangoes. The mango, visible everywhere, has been designated as the country’s national fruit. The country proudly produces the carabao variety.

The problem, for now at least, is that despite having a lot of people devoted to farming, and the potential for good climate, the Philippines' agriculture sector isn't particularly productive. A US government report found that in 2006, agriculture employed 36 percent of the labour force and accounted for 14.8 percent of GDP. Almost a decade later, these figures have not changed much.

To blame for the low productivity: extreme climate conditions. Lying on the typhoon belt of the Pacific, the Philippines is hit by 15 to 20 typhoons every year that flood vast areas of the island. In 2013, the Philippines was hit by the devastating Haiyan typhoon and in July 2014 typhoon Glenda struck. The National Disaster Risk Reduction & Management Council put damaged agricultural output due to Glenda at US$762 million.

“The Philippines is among the hardest hit by natural disasters, particularly by typhoons, floods and droughts,” Danilo C Israel and Roehlano M Briones wrote in Resilience and Recovery in Asian Disasters, published in 2014. “These natural disasters have negative economic and environmental impacts on the affected areas and the people who live there. Furthermore, the agriculture and natural resources sectors are highly vulnerable because they are directly exposed to natural disasters and their unwelcome consequences.”

But production is growing. Crop production grew 3.25 percent last year and contributed 51.7 percent of the country's total agricultural production, according to the Philippine Statistics Authority. “At current prices, the sub-sector’s gross value of output amounted to 933.7 billion pesos (US$21.1 billion). This was 14.52 percent more than the 2013 level,” the Philippine Statistics Authority said.

Official data shows that agricultural production of the Philippines accounted for 7.2 percent of the country´s exports in January 2015. In January 2015, fruit and vegetables including coconut, contributed to 65 percent of the Philippines' agricultural products exports. That is up 12.9 percent over the year. Exports of fruit and finished products reached US$115 million in January alone, even as coconut exports fell 4.3 percent.

After coconuts, bananas are the Philippines' most exported fruit, worth US$43 million, followed by pineapple finished products, including canned pineapples, at US$22 million. Exports of mango only came to US$1.1 million, while the rest of fruits and vegetables amounted US$23.3 million, five percent more than in January, 2014.

A 2013 deal to export mangoes to Australia has also created an all new market for fruit from the Philippines, following an Australia quarantine that banned the importation of Filipino mangoes from other regions than the Island of Guimaras because of the presence of mango pulp weevil (MPW) and mango seed weevil (MSW) pests in other regions of the Phillipines that have been declared now as pest-free regions. The decision benefits producers from the Luzon, Visayas and Mindanao regions.

DAFF says "a revised protocol for the import of fresh mangoes from the Philippines was formally signed. Fresh mangoes from the Philippines have been allowed into Australia for many years. This "allows the Philippines to export mangoes from two additional areas in Southern Mindanao.

And in 2014, Vietnam opened the door to Filipino agricultural production by allowing imports of fresh and processed fruits and vegetables, according to the Bureau of Plant Industry of the Philippines.“This accreditation reflects how we have improved, particularly on our products of plant origin and we are positive that this further builds our integrity in the ASEAN (Association of Southeast Asian Nations) and the international market,” said Proceso J Alcala, secretary of the Department of Agriculture. “Access to the Vietnamese market could further boost our competitive advantage in the ASEAN Economic Community market in 2015, and serve as springboard for other opportunities for the Philippine agricultural sector in the international arena.”

In 2014, Japan certified 190 mango exporters after receiving certificates for pesticide residue analysis. The US also reopened its borders to Filipino mangos.

“Prior to the effective date of this final rule, the regulations only allowed mangoes (Mangifera indica L.) to be imported into the continental United States from the Philippines if they were produced on the island of Guimaras, which was determined to be free of both Sternochetus mangiferae (mango seed weevil) and S frigidus (mango pulp weevil). Mangoes from all other areas of the Philippines except Palawan were eligible for importation into Hawaii and Guam only. Mangoes from the island of Palawan were prohibited entry into all areas of the United States due to the presence of mango pulp weevil,” the US Department of Agriculture (USDA) explained of its October 2014 decision.

The opening of the US market may ultimately have little impact on the Philippines’ fruit exports, however.“Imports from the Philippines comprise a negligible share of total fresh mango imports, less than 0.002 percent. Given the Philippines’ current very small share and the proximity of major Latin American sources, the additional quantity of fresh mango that may potentially be imported from the Philippines because of this rule is unlikely to make an appreciable difference in the total quantity imported,” the USDA said.

Still, reaching international markets, such as those in Southeast Asia, remains as a priority for the Philippine government as it pushed forward a strategy to reduce the impact of pesticides. “As we gear towards (becoming) a food sufficient nation, that is competitive to other ASEAN nations, we shall not lose focus on making sure that we provide safe, healthy and chemical-free farm produce,” said Alcala in March.The government´s budget for organic agriculture in 2015 is around US$140 million.

“More exports would mean more revenue, more labour opportunities for Filipinos and the increased contribution of the agricultural sector to the Philippine economy,” Paz Benavidez II, assistant secretary for regulations at the Department of Agriculture in the Philippines, said in a statement.